By Adam Pagnucco.
Part One explained the context of this series and some characteristics of the IRS taxpayer migration data on which it relies. Part Two revealed that Maryland is the only U.S. state to rank in the top six in household income, the top three in education levels and the bottom third in income inequality. Part Three showed that Maryland has lost billions of dollars of adjusted gross income (AGI) in recent years. Part Four showed that a handful of jurisdictions – specifically Montgomery, Baltimore and Anne Arundel counties and Baltimore City – account for most of Maryland’s AGI losses to other states. Part Five found that departing high income taxpayers are exerting a disproportionate effect on Maryland’s wealth drain. Today’s let’s look at which states are siphoning off Maryland taxpayers.
Let’s start with the flow of returns (households). The chart below shows the ten states to whom Maryland had the largest net outmigration of returns – returns leaving minus returns entering – over the ten years from 2013 through 2022.
Florida stands out. Most other states are in the region (Delaware, Pennsylvania, Virginia and West Virginia) or in the South.
Let’s zero in on Florida, the state to which Maryland has lost the most returns over the past decade. The chart below shows net outmigration of returns from Maryland to Florida from 1993 through 2022. Since the Great Recession, when net outmigration was negligible, Maryland’s loss of returns to Florida has been accelerating.
Now let’s examine the flow of adjusted gross income (AGI). The chart below shows the ten states to whom Maryland had the largest net outmigration of AGI – AGI leaving minus AGI entering – over the ten years from 2013 through 2022. AGI is adjusted for inflation using the national CPI-U and is expressed in millions of 2022 dollars.
Again, Florida dominates. It’s worth noting that we have previously identified Florida as the state to whom Montgomery County, Maryland’s largest local jurisdiction, has been losing the most income. And once again, most of these states are in the region or in the South.
Let’s look more closely at Florida. The chart below shows net outmigration of AGI (adjusted for inflation) from Maryland to Florida from 1993 through 2022. As with the number of returns, this outflow has been accelerating since the Great Recession.
Why are these states siphoning off returns and income from Maryland? We’ll look at a few factors next.